China Reaches into its Cyber Toolkit to Wage Economic Warfare

When Beijing got the word that the United States was accelerating the deployment of its Terminal High Altitude Area Defense (THAAD) system to South Korea as a response to North Korea’s latest missile tests, senior Communist Party officials went, no pun intended, ballistic. The official Chinese news agency Xinhua wrote that the deployment of THAAD will lead to an increased arms race in the region and threatened that more “missile shields of one side inevitably bring more nuclear missiles of the opposing side that can break through the missile shield.”

Meanwhile, the Chinese government has increased the pressure on South Korean private firms operating in China as a punishment and warning for Seoul’s decision. Lotte, a South Korean conglomerate that sold the government a golf course to be used for THAAD, felt the pain almost immediately upon the announcement of its role in the defense battery’s positioning. Chinese authorities shuttered dozens of Lotte stores on the mainland, using the flimsy excuse that the government had just discovered that the stores did not comply with fire regulations. Beyond the closure of the physical stores, Lotte’s website was brought down and Lotte Duty Free suffered a distributed denial-of-service attack originating from Chinese internet addresses. Initial estimates of lost business and damage from these cyber attacks are in the hundreds of thousands of dollars.